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Work Stoppages Reach Highest Level in Nearly Two Decades -- Update

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02/11/2020 | 06:50pm EST

By Eric Morath and Nora Naughton

Labor unrest reached its highest level in nearly two decades with 25 labor-related work stoppages -- including strikes and lockouts -- involving 1,000 or more workers in 2019, the Labor Department said Tuesday.

That was the most since 2001 and came during a year of solid economic growth and the lowest unemployment rate in a half century. Labor disputes tend to increase when the job market is tight and workers feel they have more leverage; the unemployment rate fell to a half-century low in 2019.

The level of labor disputes has moved higher in the past two years -- driven by work stoppages by teachers -- and is well above the record low of five in 2009, the year the recession ended -- despite union membership falling in the past decade. The total number of strikes last year was small compared with the hundreds that occurred annually in the 1960s and 70s.

Richard Trumka, president of the 12.5-million-member AFL-CIO labor federation, said workers are frustrated because they don't think they are receiving benefits from a record stock market and the longest economic expansion on record. "After decades of seeing flat wages, benefits taken away and pensions taken away, workers are ready to stand up and fight back," he said in an interview.

Strikes can be costly to businesses and workers in the form of lower revenues, productivity and lost wages. In total, 3.24 million days of labor were lost to labor disputes last year, the most of any since 2004, the Labor Department said.

"There are the direct costs of disruption such as mothballing facilities and stopping supplier deliveries, as well as the competitive losses in market share, sales, and profits," said Douglas Holtz-Eakin, president of the American Action Forum and former economic adviser to Republican Sen. John McCain and President George W. Bush. "Unfortunately, in a strong labor market, there are lower costs to labor and the probability of a strike goes up."

Most of the 425,500 workers involved in labor disputes last year and 13 of the work stoppages came in the education sector, including walkouts of public-school teachers in Chicago, Denver and Los Angeles.

The United Auto Workers' 40-day walkout at General Motors Co.'s plants was the largest strike started last year, resulting in 1.33 million days of cumulative lost labor.

The UAW strike was the first at GM since 2007, and the longest nationwide walkout at the company in a half-century. The work stoppage crippled GM's U.S. manufacturing operations and dented the auto maker's earnings by $3.6 billion last year. The effects also rippled through the broader economy, resulting in temporary layoffs for thousands of other workers as the strike dragged on.

New GM hires received higher starting pay, temporary workers got a path to full-time status and employee health-care contributions stayed at roughly 3% -- far lower than the private-sector average -- under terms that ended the strike.

Chris Eubanks, a UAW-represented worker at GM's assembly plant in Orion Township, Mich., said he expected more out of the new contract after the extended walkout. He is still feeling the personal financial toll after falling behind on bills during the strike. The UAW paid striking workers $275 a week, a fraction of their normal pay.

Still, he said the strike was a necessary action. "We really do have to fight, because they won't willingly give us what we deserve," Mr. Eubanks said.

A GM spokesman declined to comment.

"General Motors was in a relatively good financial position...and settled on an agreement that controlled their labor costs going forward, " said Marick Masters, a management professor who studies labor relations at Wayne State University in Detroit.

While the labor market remains tight, separate data released Tuesday suggested it might be loosening a bit, which could affect worker leverage. There were 6.4 million job openings at the end of December, a 14.9% drop from the same month in 2018 and the largest annual drop since December 2009, the Labor Department said.

Still, the number of job openings has exceeded the number of unemployed Americans, which stood at 5.75 million in December, for 22 consecutive months. "The trend in job growth has remained strong through January," said J.P. Morgan economist Daniel Silver. "But the recent decline in job openings signals that job growth could slow at some point."

Write to Eric Morath at eric.morath@wsj.com


Stocks mentioned in the article
ChangeLast1st jan.
GENERAL MOTORS COMPANY -4.05% 31.75 Delayed Quote.-9.59%
NTT DATA CORPORATION -2.91% 1401 End-of-day quote.1.30%
SILVER -3.07% 18.0478 Delayed Quote.4.76%
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